40 EXCLUSIVE FEATURE

In considering outsourcing elements of their production, food manufacturers may feel overwhelmed by the array of practical and
legal considerations. This is understandable as
the process — while offering important benefits
particularly to the bottom line — is pocked with
potential pitfalls.

Before taking the outsourcing plunge, it is
critical that businesses commit to processes
that ensure the safety of consumers, the security of their intellectual property and compliance
with food safety laws. By taking the following
steps, food manufacturers can protect their
brand reputation as they reap the material
benefits of a more streamlined set of operations
and reduced overhead.

It’s hard to unbreak an egg. That’s why it is
so crucial that manufacturers take their time
and perform their due diligence as they seek
out a reputable and experienced contract manufacturer. The most effective tool for vetting
potential business partners is their track record.
Focus on finding a contract manufacturer
who has proven credentials. Any time you feel
inclined to rush forward, imagine the harm to
consumers and your business should safety be
compromised.

In order to ensure you feel comfortable with
your partner, don’t outsource your preliminary
investigations. Assign a trusted member of your
team to visit each potential contract manufacturer’s areas of operations as it’s important to
assess the factory’s cleanliness, workforce and
working conditions firsthand. Similarly, be certain that all of your potential partner’s purported
certifications are valid and up-to-date. Consider
your co-manufacturer to be just that — an
important part of your business that should
share your values and objectives.

Once you’ve determined that you’ve foundthe right fit, it’s important to document theterms of the arrangement carefully. While youshould make every effort to ensure that yourcontract partner is competent, trustworthy andexperienced, a carefully worded contract willguard against the unforeseen. Think throughthe hardest questions, such as who will beresponsible in the event of a recall or harm toconsumers?

In drawing up the contract, consider two
goals. First, prevent the development of any
problems. Second, provide clear terms to dictate liability should problems arise.

In service to these two goals, be sure you’ve
enumerated in concrete and specific terminology the quality, consistency and sourcing of
inputs and other products, along with guidelines
about competitive pricing, which often will take
into account the changing prices of inputs and
discounts based on volume of products purchased. This will go a long way toward shielding
your reputation and enabling you to plan your
finances. Of course, the most important bulwark
for your brand is the protection of your most
valuable commodity — your consumers.

Whether you manufacture domestically or
overseas, you are bound by the same web of